topic Re: Converting construction loan to mortgage-how it affects credit score in Mortgage Loans

Converting construction loan to mortgage-how it affects credit score

Jonsgirl11 — Mon, 23 Oct 2023 17:36:18 GMT

We are getting ready to convert our construction loan showing as a line of credit on our credit report to our mortgage. We did a construction to perm loan. My husband and I are wondering how or if it will affect our credit when the construction loan falls off as a line of credit and then becomes a permanent mortgage. I would think that mortgages are looked at differently than lines of credit on a credit report.

Re: Converting construction loan to mortgage-how it affects credit score

PNWRambler — Mon, 23 Oct 2023 18:16:26 GMT

I can't tell you specifically what kind of point change you'll see, but most certainly your score will go up and not down. Mortgages are looked at more positively than a line of credit. I'm sure someone else will chime in that can be more specific with data points.

You don't mention your current scores or the rest of your profile (cars, student loans, credit cards) which is probably part of the equation - for instance if your construction loan is the only thing on your credit report then it's going to cause some more drastic or unusual results.

Re: Converting construction loan to mortgage-how it affects credit score

GreatLife — Tue, 24 Oct 2023 21:19:51 GMT

Our construction to perm had about 5 point dips on hard pulls for final close. Mortgage conversion looked similar to a loan servicing transfer on CR's.